Oakey

Located near Toowoomba, a large processing facility of mainly grain-fed beef, owned by NH Foods (Japanese origins). Currently processing up to 1300 animals per day. Has undergone significant upgrades to enable traceability for organic certification and assurances, with current work being carried out on methane gas collection. Problems in the past have been market fluctuations, unions and costs of production. Includes short history of early days of the Japanese/Australian meat trade markets and general QLD market conditions affecting processing

Authors Note – As Nippon Meat Packers, now NH Foods is Japanese owned firm I have included some information that is in relation to Australia/Japanese Beef early trading. I don’t know how directly relevant it would have been to the Oakey abattoir.

1956

Oakey Facility established.5

1968

Japanese Beef Trade

January. Trial shipment of chilled 1500lbs (680kg) meat vacuum packed by Borthwicks from the Murarrie plant on the Brisbane river shipped to Yokohama, Japan (Pg 72).28

Product arrived 3 weeks later(Pg 72)

Requirements by Japanese were placed on frozen beef, required frozen temperatures at all points of the supply chain, even to small retail outlets (Pg72)

Logisitically this was extremely difficult as frozen meat had to be defrosted in advance for retail sale (Pg 72)

Prior to 1960’s Japan’s main source of animal protein was whale meat and the mainstay of school lunch program (Pg 84)

Whale meat accounted for 25% of Japanese meat consumption (Pg 84)

Japan enabled a number of sub quota’s for red meat industry into which Australia was able to provide product (Pg 84)

supplied various sectors and agencies

School lunch program

Hotal quota

airline quota

1981

August. ‘Meat substitution scandal’ occurs in Australia.(Pg 82).28

Pet food grade meats, donkey, kanagroo and others were found in shipments to the US. Meat was being transported from northern parts of Australia to southern Australia, reboxed and repackaged and exported.28

Leads to Royal commission in the Australian Meat Industry.28

Profoundly damages Australia’s meat export reputation.28

leads to the evolution of AUS-MEAT.28

costs of regulation closed many export abattoirs.28

The US significantly step up standards of requirements for meat into the US under the USDA.28

Nippon establish leather wet blue tannery near abattoir to process Oakey hides and from other facilities, including competitors7

Prior to GFC hides are worth $110 each7

2003

July.Jondaryan Shire Council approve the project 08/07/2003.31

Started upgrades to plant and facilities, included new boning room, new slaughter room and a new traceability and control system1

Upgrade takes until about 20061

Slaughter capacity of approximately 1200 cattle per day1

Create 700 new jobs.31

Upgrade proposing to lift capacity to 2,000 head a day.31

Make Oakey the 2nd largest abattoir in QLD.31

Upgrades to take place over 5 years.31

$46M expansion using Marel meat equipment4,

New boning system includes 4 flowlines to take beef quarters to 96 individual workstations where beef is boned and trimmed before being vacuum packed for further processing in Japan4

Old system was meat was cut on tables now it is hanging in front of worker and is more efficent and easier4

created 500 new jobs4

make Oakey the 4th or 5th largest beef abattoir in Australia and 3rd largest in QLD4

New system expected to have effective life of 20 years with maintenance.4

key point of Marel system was the traceability, particularly important in latter years when BSE closed market access for US to Japan and allowed access by Nippon to those markets4

“Marel traceability/accountability system …proved to be a magnificant investment, despite its detractors at the time” Pat Gleeson, Oakey general manager. 10.03.2014

2004

January. Construction offically begins at the abattoir for the upgrades.32

Workforce will lift from 500 to 1,100 workers.32

processing and export earnings capacity is to double.32

First stage of the project is expected to be completed by the end of 2004.32

Expansion of the meatworks will be ready when the industry turns around.32

“So even though times are tough at the moment, now is the right time to build rather than waiting until good times and then rushing around trying to build, so it’s a confidence thing at the moment” Jim Vick, Oakey Managing Director.32

September. Oakey Ergon Energy power substation causes black out 5.5 hrs, Caused shut down of the abattoir for that time.33

Third power failure in 3 weeks.33

New $7M power facility will be built.33

December. Abattoir extenstions $46M.34

Offically opened 03.12.2004.34

Facility will use NLIS, seen as controversial at the time.34

system guarantees quality, consistency and traceability.34

Ensures importers product is high-quality and disease free.34

Oakey expansion will mean 500 new jobs over the next 3 years

increase of capacity to 2,000 head a day by 2007.34

2005

Nippon form a strategic allience with OBE Beef – Australia’s largest supplier of certified organic meat1

Plan to export meat to UK and Central Europe under ‘Borthwicks’ organic brand1

AMIEU advised that further 24 hour stoppage to occur 04/05/2012, work to resume Tuesday 08/05/2012 as Monday was a public holiday8

600 workers on strike, not to be paid during action9

Management response cease processing Friday 27/04/2012.8

AMIEU refused to allow members to bone out Thursday 26/04/2012.8

management conducted process themselves8

May 7 article claims 400 carcases still hanging in chillers11

Oakey and Management been in negotiations since May to finalise new Enterprise bargaining Agreement8

Oakey require productivity offsets required for plant to remain competitive with domestic and internation markets, current unfavourable trading conditions particularly in grain-fed business could not be sustained.8

Members of AMIEU not happy about productivity push, which includes increasing the speed of the boning room chain9

other places are working faster and they have agreements with AMIEU that are signed and certified12

Workforce would prolong strike if agreement was not reached10

The shutdown would hurt local businesses, retail had not been great in the region.51

May. Toowoomba’s Labour day celebrations, abattoir workers among meatworkers marching with signs that read “Scab labour will not be tolerated”, non-unionised salary workers would be bought in.11

AMIEU – Main issue is the chain speed in the boning room and complusory Saturday work.52

Workers walked off 27/04/2012.52

Scheduled to resume 03/05/2012.52

Now they won’t go back until 04/05/2012 (Saturday?).52

May 4. Protected action scheduled to finish today.53

AMIEU has not been told when operations can resume.53

AMIEU say will not return to work at earliest 08/05/2012 unless an agreement is reached.55

10 day strike led by AMIEU ended midnight 9th May. Management had continued to lock workers out with the AMIEU waiting to be advised of how long it would continue13

May 11th AMIEU Brian Crawford currently in talks with Oakey management Pat Gleeson.14

Management continues to lock staff out, even though strike ended, will not open until an agreement is reached.56

May 20, Oakey management release statement “..the decision of the workers to continue to strike is regrettable, but the company intends to continue to negotiate in good faith to bring about an acceptable outcome that addresses the fundamental issue of productivity with its workforce”16

Oakey has re-activated Saturday boning shifts to keep up with high demand and rates of kill.70

April. Nippon have invested $100M in Oakey facility since taking ownership in 1987.68

Biogas will produce 183.3 gigajoules of energy per day.68

represents 40% of the current useage of natural gas.68

Annual production will lift from 298,000 to more than 560,000 head.68

Staff levels will rise from current 750 to 1,400.68

Increase in production proved the need to revitalise the western rail lines to towns such as Quilpie, Charleville, Morven & Roma.68

removing cattle trucks from the roads.68

easing up supply chain process.68

Funding that was applied for under the Gillard government was scrapped under Abbott in 2013.68

Project was built without any taxpayer funding.68

July. The following charts are from a submission by the Australian government Department of Agriculture to the Senate rural and regional affairs and transport references committee inquiry into Market consolidation and the red meat processing sector.

Contractually Oakey can recieve cattle but as they have no rail siding this is not physically possible.76

Oakey has to commit to transporting a minimum of 25,000 head per annum by year three.76

equates to 28 services per annum.76

increasing to 40,000 head after 3 years.76

December. ATO publishes tax data for agribusiness corporates.77

Data interpretation – Companies do not pay compay tax on revenue (total income) they pay on profits after paying all expenses, including wages, capital replacement, supplier costs and other operating expenses.77

Income tax information is for 2013/14.77

NH Foods produced Total Income $845,824.273.77

Nil taxable income and nil tax payable.77

AACo have animals processed at Eastern abattoirs as service kill.63

See year 2013.63

Gross processing costs had increased in the 6 months to September 2015.63